Further decline is expected in the pair this week as MACD, RSI, Stochastic and 55EMA are all point towards the downside on the 4hours and Daily time-frames. A clear break of 0.80835 support, November 2013 lowest would resume further supply to 0.77209 in the medium term picture. However, a break of resistance 0.84298 will nullify the current bearish trend about to commence in the pair.
Fundamentally, the Reserve Bank of New Zealand left rates unchanged at 2.5% last week. With 35% chance of rate hike (+25 bps) priced in, the market was disappointed by the RBNZ’s decision. The statement did sound upbeat and maintain a tightening bias. However, the Kiwi was talked down by RBNZ governor which reiterated that “the exchange rate remains a considerable headwind for the economy.”
Key high impact news report to watch out for this week in the pair is the New Zealand Employment and Unemployment change which is scheduled to be released on Tuesday. This report is always released on quarterly basis and could cause further damage to the New Zealand Dollar if a disappointing figure is been published.